Student Aid And Income Tax Relief – Important Facts About The Maryland Higher Education Tax Credit And Income Tax
The Student Loan Debt Relief Tax Credit can be applied for by individuals who: Are residents of the state of Maryland and who have incurred more than $20,000 in student loan debt (either undergraduate or graduate). Who are married and who have a dependent child. You also qualify if you are a member of a working group that has been covered by the State Health Plan. Qualifying students are those who are attending an accredited university or college in the State of Maryland. If you plan to attend an accredited university in Maryland, you can apply for the Student Loan Debt Relief Tax Credit.
What’s the situation for Maryland citizens? For qualifying, they must have either an income or an asset (such as a home) which is over the qualifying amount. In addition to this, Maryland is offering two higher education tax credits, which are based on the percentage of family income that comes from various forms of income. Those taxpayers with an adjusted gross income exceeding the higher education tax credit amount will have their incomes considered for inclusion.
What does the tax credit for tuition-based scholarships entail? Students who have incurred a tuition scholarship which covers the cost of their education will not be eligible to apply for the Student Loan Debt Relief Tax Credit. Also, individuals who have an undergraduate scholarship or grant and who have not repaid the grant or scholarship within the prescribed time will not qualify. Those eligible to apply include undergraduate students who have graduated from high schools which qualify for participation in the Maryland Higher Education Loan Program. Also included are graduate students who have earned a bachelor’s degree or higher and who have a financial need to go back to school to earn another four year degree. Parents and those who support dependents who are attending an accredited college or university in Maryland are also eligible to apply.
Another student loan debt relief tax credit available in Maryland is the Federal Perkins Loan or Federal Direct Loan. Both of these programs offer students a tax break when they incur loans for educational expenses. The Federal Perkins Loan program pays a portion of a student’s tuition and fees. For parents who do not qualify for federal assistance, there is a Maryland Parent Loan that allows students to borrow money from a Maryland lender and send it back to the federal government after graduation. In either case, both loans benefit students.
Maryland has a separate income tax credit for resident parents who do not claim an income tax rebate on their personal income tax return. This credit is in effect for tax year 2021. With an application online, eligible parents can fill out an application and send it to the Maryland Department of Education, which will process the paperwork and determine if the parent qualifies. If the parent does qualify, the child may be able to receive a Federal Perkins Loan in order to pay for school.
An additional student loan debt relief tax credit available in Maryland is the Maryland Higher Education Research Trust Fund (META). Like the Federal Perkins Loan, the META loan is only available for students who are enrolled in a state-approved college or university. Residents of the District of Columbia and its suburbs are not eligible. Like the Federal Perkins Loan, Maryland residents who are in their first five years of college can apply for the Maryland higher education trust fund. To qualify, an application must be filed with the Maryland Higher Education Board.
Like the student loan debt relief tax credit program, the Maryland Higher Education Research Trust Fund also offers an income tax credit for non-resident parents who need to pay tuition and fees at public colleges in the state. The income tax year 2021 deadline is the same as the current tax year. A non-resident parent must file an application and provide proof that he or she will be attending an approved college in Maryland during the tax year. Again, like the federal program, non-resident parents must apply for an application and provide proof that they will be attending an approved college in Maryland during the tax year.
An important note about the student loan debt relief tax credit and Maryland’s personal income tax: both must be filed by the end of the year in order to be valid. Both must be filed with the Maryland state tax office before the end of the year in order to be valid. An applicant may file both forms at the same time. However, an applicant must read carefully and complete the forms properly in order to be considered eligible.